WestJet seeks to expand Encore presence across Canada, possibly into U.S

Tue Nov 19, 2013 3:08pm EST
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By Susan Taylor

TORONTO Nov 19 (Reuters) - WestJet Airlines Ltd is looking to expand its regional subsidiary Encore just five months after its launch, plotting a push beyond its western Canada base to offer service across Canada and potentially into the United States in 2015.

The regional carrier, launched this June with aggressively priced fares to compete with larger rival Air Canada, has exceeded expectations, WestJet Chief Financial Officer Vito Culmone said on Tuesday.

"You'll see us expand Encore," Culmone said at the Scotiabank Transportation and Aerospace Conference in Toronto. "We'll be in Ontario next year, in 2014, and we'll be nation-wide by 2015 and possibly even into the U.S. markets by the end of 2015."

Reporting better than expected results earlier this month, the Calgary, Alberta-based WestJet said Encore was flying full planes and beating targets. Encore currently runs with six planes, but that will grow to eight by year-end and 16 next year.

Culmone also said WestJet's new tiered ticket fares, launched in August, could be on the high end or exceed 2014 revenue forecasts for C$50-C$80 million ($48-$76 million).

Canada's No. 2 airline also said on Friday that it would make its first trans-Atlantic flight next summer, offering daily, non-stop flights to Dublin, Ireland from St. John's, Newfoundland with its Boeing 737 aircraft.

That likely represents the first stage of a longer-term plan to extend service over the Atlantic, Raymond James analyst Ben Cherniavsky wrote in a research note. That could bite into business for Air Canada's discount carrier, Rouge, which also serves Dublin and certain European cities, he wrote.

WestJet's Dublin plans are "insignificant" Air Canada's Chief Executive, Calin Rovinescu, said in a separate presentation at the transportation conference. He said Encore is "not a factor", but Air Canada was working to reduce its costs as Encore ramps up.